L
LequteMan
Guest
Nigerian authorities, pleading shortage of funds on Monday said it will begin to gradually remove fuel subsidy starting 2016, Thisday reports.
Minister of State for Petroleum, Dr. Ibe Kachikwu, made the disclosure while appearing before the Joint National Assembly Committee on Finance, Appropriation and National Planning on the consideration of Medium Term Expenditure Framework (MTEF).
He said the subsidy, put at over N1 trillion in 2015, was no longer sustainable.
The minister of state said the gradual removal strategy would begin with the nation's return to the pump price of N97 per litre from the current N87 because the government has no money to sustain the current price.
He added that if the strategy was not effective, the government would be compelled to consider total withdrawal of fuel subsidy.
“The government doesn't need to fund subsidy. There is energy around the removal of subsidy. Most Nigerians we talk to today would say, that's where to go,”he stated.
"I have since left the dictionary of subsidy by going to price modulation, which is a bit more technical. Price of refined products today is N87. It was N97 before it was removed and we really have to go back to that because we don't really have the finance to remove it. There are lots of safety barometer between the N87 and N97 per litre regime between which government does not have to fund subsidy.
"Yet the prices would be fairly close to what it used to be today. That is the first mechanism we are going to work on. It is when that mechanism fails that we will begin to look at a total subsidy exit. We believe we could achieve that."
Minister of State for Petroleum, Dr. Ibe Kachikwu, made the disclosure while appearing before the Joint National Assembly Committee on Finance, Appropriation and National Planning on the consideration of Medium Term Expenditure Framework (MTEF).
He said the subsidy, put at over N1 trillion in 2015, was no longer sustainable.
The minister of state said the gradual removal strategy would begin with the nation's return to the pump price of N97 per litre from the current N87 because the government has no money to sustain the current price.
He added that if the strategy was not effective, the government would be compelled to consider total withdrawal of fuel subsidy.
“The government doesn't need to fund subsidy. There is energy around the removal of subsidy. Most Nigerians we talk to today would say, that's where to go,”he stated.
"I have since left the dictionary of subsidy by going to price modulation, which is a bit more technical. Price of refined products today is N87. It was N97 before it was removed and we really have to go back to that because we don't really have the finance to remove it. There are lots of safety barometer between the N87 and N97 per litre regime between which government does not have to fund subsidy.
"Yet the prices would be fairly close to what it used to be today. That is the first mechanism we are going to work on. It is when that mechanism fails that we will begin to look at a total subsidy exit. We believe we could achieve that."
